GTN - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Gray Television Second Quarter 2018 Earnings Call. My name is Kelly and I will be facilitating the audio portion of today’s interactive broadcast. All lines have been placed on mute to prevent any background noise. [Operator Instructions]. At this time, I would like to turn the show over to Mr. CEO. and Chairman Howell, Hilton

Hilton Howell

Thank you, everyone. Good much, Kelly. morning, so

joining Chairman Hilton of thank As XXXX for I’m the call. all second and earnings you to Kelly mentioned, like Howell, CEO quarter I’d Gray of our Television.

Chief usual, Officer, and Financial Jim Kevin As Chief Development Ryan. our Legal by and joined today Officer, I’m our Latek;

We provide. this with disclaimer a morning begin will that will Kevin

Kevin Latek

most Those include things, everyone. in today’s a Hilton. filed included matters of from forward-looking recent discussed uncertainties. SEC The and results. various may update Good future release. obligation its earnings of the website forward-looking reports as key call the other among set morning, and Certain factors. described important as are factors Company’s those a have forward-looking with you, in the Such to regarding, Company a Thank Gray uses this these been statements website risks to differ subject www.gray.tv. number result statements source undertakes operating on The statements, statements. in future address of no is could information. the results Actual forth Company in

financial call the available website. supplements measures assist analysis evaluation ratios. cash call of We statements free next particular, We an now website and on be the deck meant financial of metrics on included flow, Company. and Hilton. to flow, updated measurements, their broadcast few made These measures return cash in leverage I broadcast non-GAAP are GAAP are corporate discussion not will the the of operating weeks. cash less to also within public a expenses, provided financial to measures, GAAP Included the our in the our are investor non-GAAP post to will to and replace certain in that but flow our as cash reconciliations flow

Hilton Howell

anticipate year. acquire year agreement our you, really second transformative quarter Kevin. this the to quarter big expected Raycom fourth our transaction and know this better Pat in And, both growing is to the forward Kevin look personally in I tracking in join and and Media. continue of the Raycom family. the is to of me I Jim LaPlatney. than of Thank much fine very closing to -- Obviously, We that The announcement people much very corporate adding news we welcoming

for hand in we work to move new with our close. to expect as growing We wait forward him this glove company and in transaction can’t

our the to quarter. results Turning for

in in release saw turned You quarter. outstanding that Television earnings our Gray another this morning

revenue figure of a XXXX Our increase XXXX. million. of record second new $XXX.X XX% This from hit second quarter represents the a quarter

net $XX.X second income the and the per quarter fully our share share. for million was diluted was quarter for a income $X.XX net Our

was contract retransmission net guidance net In recent $XX.X of and revenue gross $XX.X are $XXX light retransmission our subscriber and range retransmission renewals a revenue million to approximately our million. $XXX trends, full-year for of million to we Our was million. raising

and is higher X% at is second XXXX million. year political very than for of our adjusting second our election very Our mid-term end pacing has advertising to exceeded quarter’s include cycle. our political high in revenue political $XX.X strong and the When Political divested the all the of well revenue was QX. revenue clearly acquired guidance stations, this revenue quarter

a cash trailing million, total $XX facility, eight-quarter X.XX remind increase. $XXX.X combined basis, for I’ll million a senior on $XX quarter the the reflecting political and of total XXXX, as third historical in on quarter times was revenue year. million. At you credit $XX balance revenue which within with was third this second million We a our set will for broadcast our record year-over-year that million. quarter-end, our of our political defined cash of quarter, our flow another ratio, a expect $XXX.X the We be leverage of in basis, XX% range netting was

in slightly is pleased silver tougher advertising retransmission markets disappointed results very are revenues. and in headwinds in quality relative their is the We the many national highly core perform high of the political a Gray but we exceptionally lining headline revenue peers. in far, our There stations and economic than continued our to with the so at It suggest. ranked Television to well are

markets across see have third-party top markets to in own stations those in our markets the the which in low-ranked audits, tighten continued total up when market revenue we experienced. also Indeed, than holding better than greater revenues We station state declines stations we up. saw

other As such, dynamic the total top-ranked Gray’s full second our XX.X%. aggregate to have the news. television advertising in legacy, enduring these XX.X% of we made increase from in brand point in times. percentage quarter revenue like of a revenue audit value platforms markets weeks, showed and Results few the prove safe nearly past advertising trusted, share In

nevertheless significant transaction, milestones in building are enduring While value. Raycom to important the road not as they shareholder as our

First, we to markets senior manage acquisition to the XX operations across accommodate and our with television better have new Raycom. reorganized management our

roles He co-Chief President now Smith Bob Chief two sales Gray career numerous being our of Senior a in is and all July Our for formerly named as our stations for Operating stations Officers has enjoyed XXXX. well and on Regional general long to Vice assumed Operating President television manager efforts. Officer manager as Vice in our XXXX new sales prior Xst. as overseeing a

technology, human projects, former Company’s Waller, our new CRM performance administrative resources, focus his efficiency improvements. well and as the as Officer, In Officer. other Operating In his role, addition, continuing Nick information and functions on corporate became and Administrative Nick capital oversees traffic Chief Co-Chief benchmarking systems support including

Television. President one Pat Like LaPlatney, President Florida for and after Vice is of Vice Gray served Raycom a companies, Gray Regional WCTV and leading and has Vice Corporation. planning in with our Senior President closely a General transition of smooth long Nick career, Executive Nick he as Tallahassee, with Computer working integration XXXX Importantly, other in most and Datasouth a joined Media. of Manager President Bob, as

also promoted new We Regional Vice to Television Presidents. of Presidents four Vice the role

in Chris Lansing years, in their Lexington, Matesi Mossman served few and as past well Colorado the our Springs, other Charleston, King positions portfolio. In respective in in have Television their Vice assisting television Managers Matt our leaders within Bob stations Jaquint General For as as stations in Presidents, both Mike new overseeing many focused overseeing four as on exclusively now Smith are and stations. these Nick

West department Haltiwanger; Michigan, and Petersmark. promoted As Moran; of moved promoted Lansing, Kentucky, Debbie to we promoted we Managers. stations promoted in Charleston/Huntington, each I Manager WTVG-TV would Colorado joined three RVPs we joined promoted in Andrew as in this In Liz new time, veteran a we the Ohio; up, General also broadcasters Don us Matt K.O.S.A in Gray At Nebraska; Odessa-Midland, we Toledo, their General of Virginia, Gray Springs, Anderson; of Texas. Jeff like Lexington, joined KOSA-TV Stewart and to as to Fedele Omaha, Manager Manager in heads Davis as welcome of General of General in us Chris WOWT Television.

WRDW-TV new to late NBC, in house News of our TV facility and facility on significant to Georgia. and and for XXth, join Another We Antenna and will our was of be MyNetworkTV XX,XXX CBS, XXXX. XX. truly CW, mid square-foot XX in groundbreaking July will the crowd news, I gathered a of station affiliates newest news dignitaries personally television celebrate to best WAGT award-winning Augusta, organizations NBC This thrilled completed

Ryan. questions. the Jim practices XXst and growing our Latek bring At area will will the remarks, And this will Kevin this open to century and line to We in in for to then I their we best television over turn Company. the important point, in call after

Kevin Latek

again. status a Good I’ll of Raycom few moments morning, take to comment transaction. on just the the

As announced to the you the we In investor June station each explained call press regulatory that the move we television to of on therefore, combination and the divest Monday, on know, release nine overlapped markets the approvals in and of that and we expedite would closing. XXth. a immediately Raycom Gray morning,

Consequently, about back divestiture any call, Department when the below Indeed, not three does transaction soon requisite proposed, the plan Gray-Raycom XXXX the And and discount, national and the filed XX% both began and analog audience markets that in applications with are period Justice the midst we divestiture transaction answer announcement at from the networks controversy. world. regulators. first by were June FCC remarked without nine Antitrust with now mandatory initial the with stations by happens The UHF audience ownership sale. FCC in and Raycom of combined our of overlapped our and the as within Division, for FCC Division the the We of reach announcement, national in approved the comment reach thereafter. and XX% Gray process after of Today, in that be On regardless the the Antitrust the what Antitrust will transaction minutes I audience we public Division person can company are to the the review calls the FCC there XXth seek for the FCC. to cap the of national of FCC an the questions be adopted or for the the XX-day offering television the waivers. met

the invested received strong interest of appreciate numerous much our we -- level strong process. expeditious very and have in divested in new stations the negotiations. over this constructive to in that remains invested quite expected, through process. been the interest as the entrants we divesture work We very weeks meet stations past broadcasters final the early efforts As few deadlines The the in

to the the June time. month. receive of end As the turn we we remain in and to finalize them consequently, review your call close the fourth and get and of FCC we approvals for transaction stated, to on track Division on divestiture Antitrust quarter expect Thank this important Ryan. for Jim XXXX. before I this necessary to XXth, you And agreements the

Jim Ryan

our previous the within Thank headwinds has $XX range will everyone. filed was was million. have the to better-than-expected local and core of core national, political expectations And at $XX.X Kevin. local Even Political be revenue advertising. in would $XXX ahead quarter and the $XXX to shortly million. guided morning, on some $XX seen million the significantly release. $XXX.X XX-Q our with displacement obviously had of The total you, second million of effect our of million and million continuing Good everyone national

million of the $XX equivalent $XX to quarter better revenue when from or level well We political for our political are earned than QX $XX.X significantly very third political revenue. pleased of we of of or total historically more bodes our the XXXX. to quarter half quarter the is third guide in fourth revenue This million million that have

term our earlier, a of million we cash we $XXX.X a the on basis X.XX was our required the proceeds amount have reflecting the $XX.X balance time to we pre million our were mentioned of the in the business pay were we In and Hilton received eight-quarter to in of end the XXXX in leverage senior of prescribed $XX the limits quarter loan July, that trailing on million, at net at of portion As within reinvest sheet. times, unable option facility. credit the spectrum

future we payments current the of prepayment, term result satisfied a As the all loan. quarterly amortization under

Our QX, a were, were retrans were expectation. in on slightly -- slight slightly sorry, QX on I’m -- basis basis, numbers net ahead net of a

longstanding that. a to Our MVPD both take we revenue took well. one felt little. down were one issue. settle market, us as a was an and our QX was reverse QX, that revenue We reached that in large did comp comp lower mutually satisfactory. cause Correspondingly, an we slightly billing was we a on we down obviously noted and our did dispute in What sides came appropriate as network in reverse a well. lower our number overpaying slightly late obviously accommodation reverse that then was Also for comp adjustment with But,

events; retrans a QX’s full-year guide. reflect And net we’ve noisy, little basis, but not a on revenue unique were revenue go-forward admittedly, they were kind again, numbers we’ve sub actually So, bit. guide counts. And little did of our a reaffirmed the they increased

Hilton. turn the how retrans the with At retrans in back this and to point, all-in-all, pleased call we’re very I’ll year. net So we’re tracking for

Hilton Howell

Thank Jim. you,

lines anyone questions have. any And up so, please Kelly, the you for phone would open may

Operator

[Operator line of Certainly. question from from Your Aaron Deutsche Instructions] Bank. Watts first Please ahead. comes the go

Aaron Watts

me on. having Hi, for guys. it. appreciate I Thanks

XQ specifically on? XQ couple I’ll of there? with it’s then, know What’s opportunity a legalized what’s gives the right takes Can me. in And of questions and some the outlook. for that’s core sports also, but set both for talk Just early, you any you betting the maybe Maybe now, weak, strong see coming about advertising, for and start I auto?

Jim Ryan

part second first. of the the take I’ll question

it for our time category is about not the opportunity, everybody. in It’s but up certainly, thought we’re long a take I develop. in while term, process the will little term, for think always the for a that immediate industry excited short certainly opening I good think to

definitely as have we last a as call weakness down It far cut on change large continuing a weakness a I Generally local though, little a core QX in QX, pretty we’ve us, Communications June, marketing political was As also was auto. their XX%. unfortunate. category local. down. Again, back saw over in plans. did touch have level, that think commented two, in we or overall given which in The was quarter us a hurt with on MVPDs -- most strong. in in the got advertising bit And slow also categories, weakness, core we couple which was

there very much, too. would be how displacement anybody’s guess. So, Exactly honest, in there almost be be would to some

auto And month little and I Looking this one at in a at than on soft QX. basis issues like better be is QX, timing present. million looks to in variables. a there’s comparative a is it’s But, a stress, it day continuing

We I other which on. Jeep, believe seeing continuing Dodge especially commented have Chrysler are in weakness, people

segment rest those we’re restaurants. of see two seeing QX, MVPDs at in back, least this weakness In cutting some is impact year. the going for the also Our communications to of

But, QX, a commented we was reasonable in very like QX. They back had in and out you we gone back QX looks of brought they money remember, to are in out bout are If and McDonald’s network. it pleased.

frustrating little you with sometimes, it. have But, for a just us. deal it’s to So,

Aaron Watts

and it’s I in XQ, fair? overall, looking Xish Is So, that is down similar XQ guess, overall.

Jim Ryan

on basis. QX if combined about X QX, Yes. on you down a it as -- more same, was little down down is reported; historical bit the a Xish.

key type come than it’s the in that political of think to certainly -- predict stronger problem. It’s love the have and potential currently has anticipate. now. We I there, to we to impossible right

is in is core, say I’d on thing the stronger put number going only the displacement. the political pressure of because the So, to QX, probably just

Aaron Watts

gets No. Jim, it noisy. for one I appreciate the detail, more know I you.

your expectations around leverage Given previously in I your I had think, how times, right? you at for for if year-end pro XQ any Raycom? land out XQ, remember on and forma shook you X change outlook said would

Jim Ryan

We No. at to times. pro right close expect forma still land around X

Operator

Fargo. the from line Ryvicker next of Wells go Your ahead. Marci question comes from Please

Marci Ryvicker

the busy. have the you. Thank should imply We does for for margin you call. now of I calculated year? net before this were full What sort retrans

Kevin Latek

Marci, it’s Kevin. It’s roughly about XX%.

Marci Ryvicker

that the given at on closed your then, that is other assets Raycom of look is assets, once what and is be acquisition coming market to to And point Raycom time, coupled with a at the seem fact ability integrated? in there the other and lot this

Kevin Latek

is do tuck-ins, be you Company. a were doing additive see as course repeat we’ll it’s standpoint, or months. not to are focus if call, at look financial thereafter the four we be past where debt. going XX, our nothing that’s those, if described is and over that we particularly will could everything there and smooth years six on don’t first we’ll best priority attractive are to you’re think going way of reiterate look to -- our June and good on easy five that in certainly see from going a Raycom free. otherwise get they pay couple the I number And and today to our to But, the very, If to one very of the and We But, closing us a to transactions be going said and Raycom opportunities having attractive of closing a transition. could down is

integrated Raycom day company, forward on priorities really are one. unified marching and new starting that under getting Our absolutely

Marci Ryvicker

in just should what Correct? when political we I than to QX if be then, QX, clarify core taking does And or want come for you’re lower ahead then, guiding. down

Jim Ryan

It has the potential, Marci.

little what know I it’s down come to yes, than many core units political But, to really have would we more are thinking. pops, to difficult already really tell. expect I QX. in a You so currently really, sell if QX bit

You going work, it’s to know so. how

Marci Ryvicker

Thank Yes. you. Got it.

Hilton Howell

Thank you, Marci.

Operator

of comes from Please Evans from line Kyle question the Stephens. go Your ahead. next

Kyle Evans

There quarter? count, sounds parts in lot gross hone net in a were, Can and the retrans. it of sub moving in you like, on

Kevin Latek

positive. but was be equal a operators had Kyle, actually MVPDs a particularly pretty count first OTT up that pick have the time get In shedding is the numbers we’re Kevin. obviously, nothing pretty are on down We a a a in little a quarter, than and for guys we’re MVPDs, OTT QX, The large amount. go the what couple two there. couple it’s mean, Sub comfortable was continuing particularly worse to to our go not I the the best. an see on think we rounding small then lag and basis, through it then stable. there and not sub subs, of I I traditional MVPD mean, but But, MVPDs. on would at by larger roll they error, down saw And and is that about attention seem lot bit, us. a amount, up reports we

Kyle Evans

When when market any closing, integration, strategically might with if sell? there, review you you are and are to be done stations there that are -- willing larger done you stations and Raycom

Kevin Latek

haven’t that. We considered

Kyle Evans

percent, you your would network lastly, and And or review rather? renewal MVPD sub by count

Kevin Latek

a on In next have the end Our have that’s off-cycle, those of shortly less retrans separate around -- with retrans and our vast XXX There what there thereafter; public we obviously, are Yes, beginning very refer drops than to small we’re up, And very expired, We this of no no or ‘XX. were the on of were our sub disputes. are ‘XX, that so we XX% is all contracts XX%, for at X% cycles. contracts year, of all tranche, say we did agreements, that the which three-year as negotiations of and year results this somewhere I’d -- of were a pleased base. done. bulk XX? between of XX% End of them end those. handful essentially

NBCs a out On we for renewal extend by extend to markets this one CBS, to of side, our end the had affiliations. we of up rest are up or a two out couple year, our those did flip at and and with the the Last CBS of years all deal year.

XXXX -- of this XX the X% our is negotiated in for XX year. was that year. our done were August June FOX, then, reprice of business, the boxes that I think into all contracts will last next expire rate older of those the unusual expire XXXX, card new XXXX, in don’t they boxes all As And less again, is Company. of of than

so, we -- a because really industry not it, [indiscernible] for purposes, player but in a X mentioned that major us. So, Big a big for -- it��s

than We how contract in be with NBC that we expect what But going that’s have what we know to -- is finalized, work deal expensive to certainly negotiated out. -- until the don’t know we more NBC will don’t XXXX. really

another them. us for for We expect and are on good be that agreement good it will long-term terms

have the at. think, something I telecast looked We in like the book NBC stations I XX and rating last top

very us; I they’re important we’re them. So, very and think, to important to

before get there, we’ll year. deal the things strong a after have worked have we And finalized. of rates that relationship. guidance be what would certainly end those the And on So, more we’ll out

Kyle Evans

that right the the Jim. $XX Is still cash quarter tax last gave number -- that the you quick year? for million, is for guide one One for

Jim Ryan

Yes. That’s the in right ballpark.

Operator

of from comes question Kurnos next from Your go Benchmark ahead. Co. Please Dan the The line

Dan Kurnos

deal. strip onetime you in adjusted question, what on far so most that accumulate housekeeping companies or accumulated of just kind One to EBITDA? the much expect -- or Raycom have quick from the are QX, out How because other costs Jim guys Kevin,

Jim Ryan

associated the We expect, $X deal, million professional as fees as cost far X to of with QX. in

a of X fact, in our is made was current matter said that. $X on section, the specific we -- to guidance release, a in As the million think, I comment yes, estimate. It we

Dan Kurnos

And how there any? in QX? much was Was it

Jim Ryan

in change and QX. through QX like year-to-date, million or million $X and was million was $X.X $X.X it It

Dan Kurnos

down. you a lower have incredible lot us side, And done guys the then, an The anticipated. think of obviously guide keeping I expenses expense is most than on job

able keep that restructuring. of level, I and think, you running what still guys Hilton I at have in but your announced you top-down can sort some on know don’t how being confidence down just to keep of this runway sort expenses sort line? kind OpEx of long of

Hilton Howell

briefly. forward leanly Dan, I’ll our of is a comment our operations as I’m And I line, Hilton. just meanly try the see something that continuing, for get and going It’s at all on as expense we to as We a while. we control. And proud that expect can time. this as this Company. in look bright run very a to

Operator

comes from Capital go Markets. Leo Your next from question the Kulp of line RBC ahead. Please

Leo Kulp

you. for one just Jim,

or historically XX% you’ve any of seeing there mentioned would that XQ. year, different tough there? in that you’re revenue reason this be any your why something You gotten Is comps political

Jim Ryan

XX%-plus. No. just I Company, has mean, be now literally, is in It is as far every I’ve which years been political the with been XX about back October. cycle to

So, this I to different. any have be year no reason wouldn’t believe

Operator

question line Please Your Goss Jim from Research. of next ahead. Barrington from go the comes

Jim Goss

Go I’m other beneficial reverse to NBC Kevin. you to might are mix and expensive think the to impact be Just of than one Raycom negotiations in you. before, any be thought whether ahead, curious -- of about that that? negotiations, will the the moderate And Raycom or the more comp will contract upside to the looking you’ve extent retrans talked of into adding the help would be you terms how it. the that more this you just wondering what

Kevin Latek

year, the rising market Hi, it the gross a sides. before, comment expensive we be year, did this year XXXX than did network to more we is Jim. in My paid NBC, more on more is It’s fact is will It than before. Kevin. than in simple and every pay that XXXX. year a Right? a in get both we Every we just on

will not for So, the just higher NBC, each next network, our and will anything be fact, we we don’t year this And we gross year. to than next negative paying year, every are is than more year. it have channel truly imply this pay what’s

It’s to is we it, mean, anything next it’s good down, to but locked not is just locked I have ways. from publicly. nothing. deal we year. of talk Feel that overall board there, of change is Adding across -- Raycom national to haven’t NBC the there. going imply for a good we -- about there to So, nothing sharing down negative think some We the the to profile sales there’s different in I only mean newsgathering lot opportunities until the it’s Company probably resources don’t among not have about stations.

Our in portfolio -- the little hand have possible of little lot where got We’ve that glove is best think the a a they they stations I stations. in a have industry.

have execute we that on. lot. there’s really lot stuff can a And a of We

In where obviously separate a that terms P&L, might around like bigger our running terms that synergy We’ve that in all of of look Company have company honestly fits not terms the efficiently what the booked haven’t pieces model synergies specific There how that our two in of are given we than that and of anything revenue put thought. companies. might we impact expenses. or more much in

viewers at experience bigger nothing negotiating out provides level company a that advertisers and we for what and to logic acquisition bigger day-to-day station here our and basis It’s do with our for to of a for as and do sake becoming our just everything going can better us with own employees. do on a models synergy had a Our a company. the

any on or have So, other I honest. to vendors specific retrans don’t any thoughts be

Jim Goss

more terms the day, change getting starting really little cap the retrans a With to some a the still does yet, important CBS have small? or an all to impact does not of that dynamic too piece, of that bit the other at it’s ask of OTT be in enough detailed it maybe

Kevin Latek

too small. It is

a I a CBS, the retrans news point, have worth people it’s if strong more in that data channel, football surely, than local operation, than et worth CBS And we who the have an over that $X paid month. to retrans $X negotiation we’re today. in number live millions what that’s there NFL it MVPD one with more retrans. believe shows, is is network stations And of think interesting access a month all the to then, cetera, award battle with our constantly worth we’re getting part of are affiliated

impacting to extent So, OTT is the really conversations. those

Access set à in the has is la think helpful. basis, I an price that’s consumers what CBS marketplace on for the worth to today All carte and So, very

Beyond I of change, impact been accelerates. in of don’t think. that, could there -- much don’t if hasn’t that an negotiations, OTT course And I

Jim Goss

one for maybe Jim. And

that. still I into season get read intense, trying different as political, You how a Does different you’ve that thought be I’m there years and any this were it more But seem XX that on political over might seem the about taken or talking much sure. place going been Gray. the just year? doesn’t the or I’m to patterns quite this not are have with

Jim Ryan

-- this us the Jim, I we’ve only year, not has the data this people season but points so industry seen good, seen. think tone far whole the political year all is of given other

the of as mood about, back as the have election you get there we said, will think every of as because year surprises in I seen it country. day. being That want single strong are So, cycle just you to a far to be always think political before

are Some and not positive very actually so and are great very surprises others disappointing. of them are

for Gray. we to today, a very political are how industry full-year it out to and because year be a election to said say put expect But, consistently political as year a wrong. going good So, certainly guaranteed the number day no November But, I in out not have anybody’s matter plays all and all for is we it what now guess. good year long, are we would very we be between exactly

Jim Goss

years be now, two As to the presidential you long from I want to do year? for getting any as preview mean, you wrong, have

Hilton Howell

Higher.

Jim Ryan

I think, of through well, take we start talking then XXXX as itself get ‘XX. care will but let’s about first, can because ‘XX

Jim Goss

a it appreciate lot. Thanks Okay. I

Operator

Securities. of from question comes next Wells Fargo line from ahead. Davis Your Hebert Please the go

Davis Hebert

question DC, versus different political you’re that around a this how anything candidates the years? election Kevin, people you the little ask prior are aspect, want maybe I bit Just noticing to to cycle fundraising since are different anything are close be might positioning? -- differently.

Kevin Latek

that parties appears opposite Fundraising it Neither We it money a to Trump we day -- to Supreme primaries of and following galvanized spending. that. was beginning and and did we there’s we near didn’t money the the have was that what noteworthy Court We This for we We’ve detailed that levels. well, expect. Trump. And we some didn’t lot expecting issue both we the in in has a things Trump not at seems House political all Governor had problem. for problem additions I this Trump call expect as the our ‘XX, be couple and with supported there’s seen advertise always, weren’t the spent to than more and In real The seems of we’ve whistle that remember had money have we not people of election had intervening super money in also saw Obviously, people out. be that sides. And did -- us. candidates political following that more in runoffs not year. triggered earnings follow candidate on historical some one Donald anywhere And Senate we of we have do completely on the ‘XX, neither that robust anywhere XXXX. ‘XX. say, that even of of extent near as their year, had with packs hear

again, and see that is single and is and being every did that ways than even money them raised in money seeing not lot committed for being it’s that’s of are. not expected, cycle -- in there this money in but that��s them ‘XX And a race better because we’re ‘XX. matter behind we So, for

So, political I a of probably those lot think And there’s lot and paranoia a political fear. drive lot things of fundraising. of a and excitement dollars,

Davis Hebert

some the you think of with or on rewarding in kind you That’s do especially really regards TV to that’s and is digital general, of local helpful. minimal a advertising backlash sense broadcast that do given impact? Facebook political, And that

Kevin Latek

on Wall contrary of Street sort events seen We’ve versus this.

we on have aisle with on pretty reps, don’t dollars political deal they the digital. to both sides we the that local directly, -- whom work TV, advertisers Our political the work any because have -- been political of us in clear don’t

change goes go to because an money money, people believe digital and but people on ad don’t out Facebook. their organize and so, don’t And buyers vote saw television. and local raise they rallies to in political votes to The

I think, again. time that time and we’ve seen

it seeing year. certainly this We’re

any we’ve So, thought that dollars never really to in digital great move political numbers.

the It about political interesting, see on understand of ad hurt. if on more what buyers cable stations. -- the look it are starting never digital. But, some the has local than is for. with political competition that’s clothes us. can of is fine but people out power our emperor Digital to stuff, digital is -- certainly especially we’ve dollars is no there news about That’s we local television, So,

Davis Hebert

year. the line at Got start the How it, you Jim. of core for the quick expectations? understood. And performed your just Has anticipated ones is performed? in that know weaker guys of digital a with I a perhaps little has than couple

Jim Ryan

Yes.

you digital know, ad all within As our organic is our markets. sales of

local. have and expectation. now into for it years been digital our at why we doing grouped yes, Yes. But, fine, has that’s So, basically,

Davis Hebert

think, Correct? leverage, housekeeping. two one, just I the then, average. number And gave LTM net year last was you Jim,

Jim Ryan

Yes.

X.XX… just LTM all I’ve sec. So, it look got a up. net to cash was

Davis Hebert

much. Okay. so you Thank

Jim Ryan

number. XXX, XXX operating flow cash a On

Davis Hebert

you. helpful. Okay, Thank great. Very

Jim Ryan

Yes, X.X…

Operator

the comes Michael question Kupinski next of Your Noble from Market. from Capital line

Michael Kupinski

post as you there you post-Raycom? see strategy, Thank acquisition wondering, how of of geographic but your touched size, would this in I network in just just interest, was Raycom, And strategy, to acquisition clarify. your affiliations, to any question, wanted it with market you. if kind specifically general relates changes acquisition on previous be I

Kevin Latek

Michael. Kevin, is This

San no changed. change. not to at justify Diego Vegas, but really we would would but We was, last sort regardless acquisition and I at, before several made location. And looked we the strategy of number again, were looked look prices the and number has in that Las sense we’ve reason one, and paid. we And that everything. for I and station joined looked two Company, years, we number have why purchase Our the it affiliation, loved Post-Raycom, of network TV see things if station, geographic one TV of at couldn’t regardless every location the -- that strong at geographic are

now I on more focus grow than to trying to the be think, additional company debt our down and is paying going so integrating acquisitions. through Raycom

I think, to -- we heard I’ve never There’s our change a look same the at things. plan of to continue kinds should that we hint acquisition strategy.

We two number right stations. TV and of now number have the highest portfolio quality one

XXX% When that close or bit. one As of come markets percentage number XXX% will you two. a number down stations our we Raycom, know, -- have our of

portfolio have the still for we important shareholder quality that’s industry. value. And very will of We the in growth think long-term highest the

we our going we’re strategy from what but Company we’re going as So, absolutely criteria not to Raycom. have been, may we to be. change acquisition to of or this be not want as We acquisitive depart not because

Michael Kupinski

the been terms the the And and particularly programmatic and efforts in the technology then, participation that? update doing thought mechanisms then, on X.X to on an is your in of just What buying maybe me trajectory of process ATS kind maybe like has can And trying advertising, on in -- -- if trying of investing X.X? core maybe and give and things change of where terms Company industry automated you ATSC national. in and

Hilton Howell

recognize television, certainly -- the are that agree national is it costs for completely national buy getting we dollars And too And easier. high advertisers. of local ways So, is other to the problem. spending especially we transaction advertising

using, one and are the been not stations the buyers we years, that are couple using out working, last using, platform automated are platforms using. all couple there. are the of are all have automated and There the of that a testing systems the the all traffic For all agencies is

to just pros tomorrow. client cons, platforms there’s and with and So, we traffic interact The was have billing turn it different best And with good a solutions. and a operate try them see -- them good to find three the or couple to help way of and of solution or to good we and automated our different a decided can and all try nothing systems work we differently.

industry tremendous just standard tremendous last made has think, no the for years. I two progress vendors have one progress. there automated. These yet in But, is made the even

programmatic define race some we involves In And that’s no we humans. all is of perhaps the do. what of terms think than to Programmatic differently a you programmatic, bottom. of

we’re Again, on better So, made promise. or near interested the -- not ad we’re we’ve in putting have the lot computers high-valued national we vendors hopeful not ad involved -- in programmatic priced give made dollars local great strides. And inventory like in down. continue on great systems, term. high we’re to The automated a strides, systems going very we’re especially side have that to the think

In we a operating terms in, of cheerleader ATSC our X.X. profit ATSC markets a near-term X.X, the -- we’ve see opportunity to from don’t because Gray been which in is

up. that the mobile had built money the mobile of there. worked Company, can of we’ve or on said, We’ve [ph] DTV, left supporting spent bodies. one up standards, we and been out a few on have DTV X.X. setting We in We broadcasters the joined the When we four little were maybe term wherever the actually publicly is thought all and stations people, I this the

get internet to All lot became little test larger with dollars that markets, time But, launched with folks doing putting turned before We and all on didn’t pretty them do to in when and technology, we frankly who prove and going more the bit try more were to ways came a of we to spend of think Access, things. X.X, it around let and decided I our have ahead we the any willing to that’s this different were We off. we some case. go So, a Syncbak it actually experiment a been for successful started started CBS And the that us traction. tested and beta any generally. out one really CBS, something and for really then, thinking that stations affiliates

So, has based convert a a that on the our regard will market station-by-station ROI. we to been without on station size basis view

So, hypothetically in Platte, converting be we what be lot not return Lexington, Lexington, there It’s XXXX, would us X.X XXXX. we to time before North Nebraska, on going a is that to on West XXXX there’s at But, a of justify TV Palm. our driven by alter North and we working our X.X bit this expertise Gray. Buying on a Nebraska just like near-term either. will because Platte, lot if because Kentucky. probably Kentucky, we’re us for But, is had the for Raycom, aggressively Toledo, investment. in an stations opportunities company integration, because for basis it’s ROI going the is And we’re for not what company to a and convert about event; haven’t in still think then larger for Raycom It a think early larger frankly, Raycom will like much frankly more a XXXX is X.X markets. is before to the means like the Tampa, with positive know a in your that more analysis combined stations event probably certainly stations it move be markets of and running with possibility to will too

Operator

the of ahead. line from Watts Your next comes question Aaron Bank. go from Deutsche Please

Aaron Watts

sales for Gray sense bigger any I’m curious that, certain then, follow-up. of it A, DoJ investigating on? the station Gray reports owners. of ad is if, whatever in for contacted; fallout a honing for as The One whole Hey, the DoJ picture question. the is regardless and practices guys. of industry B, Thanks the from been that independent or has the

Hilton Howell

Aaron, about we or don’t of rumors litigation investigations. talk litigation or rumors of

Aaron Watts

enough. Okay, you. Thank fair

Operator

the And, at I there to are closing over now turn questions time. further Howell no this remarks. call back Hilton will for

Hilton Howell

Great. you Thank you, being for here Kelly. everyone today. Thank

exceptionally a the and look you going to remarkable that have of with once we forward the look to LaPlatney with in building proud transaction have your And call you going our we’re anymore of be closed our this proud And think to can’t quarter. position. we partnership going to and for you, here an quarter. women we’re quarter. very joining We and men outstanding Raycom morning. exceptionally Thank group. of having Pat we third than transformative time Raycom. transaction proud We’re next to talking we’ll Gray performance in having It’s this this us forward our with put that’s a And are

Operator

call. conference today’s concludes This

disconnect. now may You

Gray Television (GTN) 11 Aug 182018 Q2 Earnings call transcript